Essay subject principles of marketing topic market segmentation and selecting relevant target market for enterprise

Customer profile of young male and female customers with low income, living in the South of Vietnam 2.6.2.. Customer profile of young male and female customers with low income, living in

UEH UNIVERSITY UEH COLLEGE OF BUSINESS SCHOOL OF INTERNATIONAL BUSINESS AND MARKETING

ESSAY SUBJECT: PRINCIPLES OF MARKETING

Topic: Market segmentation and selecting relevant target

market for enterprise

Course code: 23C1BUS50307018

Lecturer: Associate Professor Doctor Tran Mai Dong

Student: Nguyen Huynh Kieu Giang

Student code: 31231023466

Fashion is one of the most surging industries, characterized by its ever-changing nature, where creativity converges with commerce to influence global trends In this dynamic environment, understanding the intricacies of market segmentation becomes paramount for fashion brands aiming to stay attuned to consumer demands and preferences Segmentation allows businesses to create tailored strategies that resonate with specific target audiences, ensuring that products align seamlessly with the diverse lifestyles, tastes, and cultural nuances of consumers This essay uses traditional marketing criteria in market segmentation to shed light on potential customer segments, helping businesses build appropriate customer profiles in a detailed and accurate manner

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TABLE OF CONTENTS ABSTRACT

TABLE OF CONTENTS

CHAPTER 1 INTRODUCTION

CHAPTER 2 DISCUSSION

2.1 Definitions

2.1.1 Market Segmentation

2.1.2 Market Segmentation Benefits

2.1.3 Target Market

2.1.4 Customer Profile

2.1.5 Local Brand

2.2 Market Segmentation Criteria

2.2.1 Demographic Segmentation

2.2.2 Geographic Segmentation

2.2.3 Psychographic Segmentation

2.2.4 Behavioural Segmentation

2.3 An Overview of the Market

2.3.1 Overview of the Fashion Market

2.3.2 Vietnamese Local Brand Market

2.4 An Overview of Hey You

2.4.1 General Information

2.4.2 General Introduction

2.4.3 Specific features

2.5 Identify Target Market

2.5.1 Market Segmentation

2.5.1.1 Demographic Segmentation

2.5.1.2 Geographic Segmentation

2.5.1.3 Psychographic Segmentation

2.5.1.4 Behavioural Segmentation

2.5.2 Target Market for Hey You

2.6 Customer Profile

2.6.1 Customer profile of young male and female customers with low income, living in the South of Vietnam

2.6.2 Customer profile of young male and female customers with low income, living in Northern Vietnam

2.6.3 Customer profile of young male and female customers with medium income

CHAPTER 3 CONCLUSION

CHAPTER 4 REFERENCES

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CHAPTER 1 INTRODUCTION

This essay delves into the intricate landscape of market segmentation within the local brand fashion market Examining the diverse factors influencing consumer behavior, the study investigates how local fashion brands strategically segment their target audience based on demographic, geographic, psychographic, and behavioral criteria By scrutinizing the interplay between consumers' age, gender, income levels, lifestyle, social status, and purchasing behaviors, the essay finally selects three key customer profiles for the local fashion brand Hey You (Vietnam) These three customer profiles include Customer profile of young male and female customers with low income, living in the South of Vietnam, Customer profile of young male and female customers with low income, living in Northern Vietnam, Customer profile of young male and female customers with medium income The research synthesizes both theoretical frameworks and empirical insights to provide a comprehensive understanding of the market segmentation dynamics, shedding light on the pivotal role it plays and pointing out the potential customer profiles for the success of local brands in the fashion industry

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CHAPTER 2 DISCUSSION

2.1 Definitions

2.1.1 Market Segmentation

Market segmentation involves dividing a market into smaller segments characterized by unique needs, traits, or behaviors that might require separate marketing strategies or mixes (Kolter & Amstrong, 2014)

2.1.2 Market Segmentation Benefits

Market segmentation enables marketers to precisely customize the company's marketing activities to suit individual customers' preferences Segmentation facilitates businesses in not only meeting but exceeding their customers' needs It may also allow businesses to evaluate the competitors’ strengths and weaknesses Consequently, this approach enables companies to identify untapped business opportunities in markets that may have been underserved (Camilleri,

M A., 2018)

2.1.3 Target Market

A target market refers to a distinct cluster of potential customers that a business aims to engage through its products and marketing endeavors This entails identifying the attributes and requirements of a specific section of the population to adeptly customize marketing strategies (Kolter & Amstrong, 2017)

2.1.4 Customer Profile

A "customer profile" is a detailed and organized representation of a business's ideal customer based on various characteristics, demographics, preferences, and behaviors This tool is wielded

in marketing to gain insights into and effectively target distinct market segments (Kotler & Keller, 2016)

2.1.5 Local Brand

A Local Brand is defined as a brand originating and functioning within a designated geographic area or country, typically aligned with the tastes and requirements of the local market Its distinctiveness lies in its affiliation with a specific region and its dedication to catering to the needs of the local community (Kotler & Keller, 2016)

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2.2 Market Segmentation Criteria

The traditional variables that may be used for market segmentation can be grouped into four main categories: (i) Demographic; (ii) Geographic (iii) Psychographic; (iv) Behavioural

2.2.1 Demographic Segmentation

Demographic Segmentation involves dividing the market into segments based on variables such

as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation This factor serves as the most commonly applied foundation for dividing customer groups One explanation is that consumer needs, desires, and usage patterns frequently vary closely with demographic variables Additionally, demographic factors are simpler to assess compared to many other variables

For example, females are shown to be more involved in shopping, clothing products, and fashion (Anić, 2015) According to Low and Freeman (2007), women are likely to shop irrespective of the specific discount offered and often rely on the media to update current fashion trends Females were also less likely to reduce their expenditures on fashion items if faced with the necessity to cut back on spending overall (Pentecost et al, 2010) They are more novelty-fashion conscious (Mitchell and Walsh, 2004), and thus women are expected to display greater interest

in clothing and have a higher tendency toward fashion consciousness (Kwon, 1997; Parker et al, 2004) These findings demonstrate that if enterprises pay more attention to this edge in marketing their products, they can generate more revenue and profit margins

Age is another important theme in market segmentation Rocha et al (2005) show that consumers of varying ages in the UK possess different requirements and encounters when it comes to fashion apparel Furthermore, Parker and Wang (2016) suggest that younger consumers find greater enjoyment in fashion shopping compared to their older counterparts They exhibit a preference for trying new products, and clothes from well-known brand names, and are less sensitive to pricing fluctuation (Dickson et al., 2004) Conversely, older consumers exhibit more economically efficient shopping behaviors They engage in more routine shopping practices, favor well-established brands, and display an unwillingness to explore novel products (Cole et al., 2008)

The monthly family income strongly influences the proportion of monthly income allocated to clothing Clothing and fast fashion consumption are positively related to the family income factor Sushil & Ramratan, (2023) demonstrate that with increasing family income, the percentage of monthly income spent on clothing increased For people with low income, their 6

purpose in buying clothes is just to fulfill basic physiological and security needs as they cannot afford the apparel of famous brands (Xitong Xiang, 2021) Conversely, individuals with stable incomes are paying more and more attention to their clothing As the basic needs are already satisfied, they would shift their focus to luxury items to meet their self-esteem needs, such as representing social status or achieving more respect from others (Xitong Xiang, 2021) According to Henry (2014), as income levels rise, luxury items constitute a larger portion of the consumer's overall market expenditures

2.2.2 Geographic Segmentation

Geographic segmentation involves dividing the market into distinct geographical units, such as nations, regions, states, counties, cities, or even neighborhoods In recent times, many companies have tailored their products, advertising, promotional, and sales strategies to align with the specific requirements of individual regions, cities, and neighborhoods A company may choose

to operate solely in selected geographical areas or extend its presence to cover all regions while paying attention to geographical differences in needs and wants This segmentation approach is widely adopted due to the evident disparities in consumer demand across geographical regions For instance, residents in Northern Vietnam may seek to purchase warm clothing during the winter months, whereas those in Southern Vietnam might exhibit less inclination due to the absence of winter-like conditions in the region

Culture and religion in the places where businesses want to promote their products are also factors that need to be taken into account For instance, the essence of the dress code for Muslim women in Middle Eastern nations is to hide most of their bodies except for their hands and faces Therefore, if businesses want to develop modern, tight-fitting fashion products that accentuate the allure of the woman's body, businesses need to consider carefully before entering this market Take Starbucks coffee as an example: "When in Rome, do as the Romans do” In December

2022, Starbucks officially opened a store in Hoi An ancient town (Vietnam) To be able to blend into the ancient atmosphere of the town, this brand has built its store with antiquity, which satisfied many customers in Vietnam The act of "joining custom" of the famous coffee brand quickly became famous on the social network platform, receiving a lot of compliments, increasing brand recognition, and attracting new customers to Starbucks

2.2.3 Psychographic Segmentation

Psychographic segmentation involves the division of a market into distinct segments based on factors such as social class, lifestyle, or personality traits The psychographic variables are used 7

when purchasing behaviors correlate with the personality or lifestyles of consumers (Camilleri,

M A., 2018) For instance, individuals who buy sportswear are more likely to engage in sports

or physical activities Moreover, one's social status plays a role in shaping their purchasing intentions Clothing serves as a visible means for individuals to showcase their status, so those with higher status may find new fashion trends appealing as they can have opportunities to enhance their standing (Goldsmith, R et al, 1996) Thorstein Veblen (1899) posits that the affluent class establishes fashion trends by conspicuously displaying leisure, consumption, and extravagance Simmel (1904) further contends that changes in fashion are initiated by the upper class, with the middle and lower classes expressing their evolving relationships with the upper classes by adopting their styles Additionally, there is an internal drive within each class, as well

as across different classes, to express and affirm individual uniqueness

In the sum of these aforementioned views, we can classify fashion consumers into three main categories upper class, middle class, and lower class, with the upper class as the pioneer in purchasing luxury items and creating a revolution in fashion

2.2.4 Behavioural Segmentation

Behavioral segmentation involves dividing a market into segments based on consumers' knowledge, attitudes, product usage, or responses This segmentation approach goes beyond merely identifying the preferences of a specific customer group; it provides insights into the channels they frequent and the type of messaging that resonates with them By analyzing customer behavior data, brands can define patterns and preferences, enabling them to execute targeted campaigns and offer personalized customer experiences For instance, brands can customize their messages and promotional incentives by considering a customer's previous purchase history or interactions with the brand's marketing channels Nike exemplifies effective behavioral segmentation through its Nike Plus membership program This loyalty initiative, which is free to join, offers members exclusive perks and access to product collections available only to members

2.3 An Overview of the Market

2.3.1 Overview of the Fashion Market

The current global fashion market is characterized by dynamic shifts and evolving consumer preferences Rapid advancements in technology and increased connectivity have facilitated the globalization of fashion trends, allowing styles to transcend borders more seamlessly than ever Sustainability and ethical practices have gained significant traction, with consumers increasingly 8

prioritizing eco-friendly and socially responsible fashion choices E-commerce continues to play

a pivotal role, reshaping the retail landscape and fostering a more personalized shopping experience Influencer marketing and social media play a crucial role in shaping consumer perceptions and driving trends Fast fashion remains prevalent, but there is a growing emphasis

on slow fashion and the value of timeless, high-quality pieces The industry is navigating challenges such as supply chain disruptions, labor issues, and the aftermath of the COVID-19 pandemic, prompting a reevaluation of traditional business models As the fashion market continues to evolve, adaptability, innovation, and a commitment to sustainability are becoming essential for brands to thrive in this ever-changing landscape

In Vietnam, the fashion industry is a rapidly growing sector that significantly contributes to the national economy In 2023, it continues to be one of the fastest-growing fields, marked by an increase in production, exports, and domestic consumption The market witnessed the emergence

of several new trends in 2023 The most notable among them is the fusion of traditional and modern elements, honoring Vietnamese culture through design and the use of natural and sustainable materials Particularly, in recent times and in the future, the Vietnamese fashion industry is placing considerable emphasis on sustainable development Fashion enterprises are increasingly incorporating technology and sustainable production methods, utilizing recycled materials, and minimizing environmental impact

2.3.2 Vietnamese Local Brand Market

Although there have been many domestic brands born since the 90s, Vietnam's local brand market only really exploded in early 2018 when it witnessed the birth of new brands Various domestic fashion brands such as 5THEWAY, ClownZ, and BoBui The domestic fashion brand market in Vietnam is going through a period of vibrant development, reflecting the diversity and creativity in the industry Unique Vietnamese fashion enterprises have combined tradition and contemporaryity, creating products that reflect the country's unique cultural characteristics Vietnamese consumers are becoming increasingly sensitive and demanding about the quality and value of fashion products The market is witnessing a special preference for domestic fashion brands, showing pride and support for the domestic products of the consumers

2.4 An Overview of Hey You

2.4.1 General Information

- Stores:

TP Hồ Chí Minh:

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5B đường số 2, khu phố 2, phường Tam Bình, TP Thủ Đức

182/13A Lê Văn Sỹ, Phường 10, quận Phú Nhuận

TP Cần Thơ:

Ninh Kiều: 47 đường Nguyễn Việt Hồng, Phường An Phú, Ninh Kiều, Cần Thơ

- Hotline: 02822086269

- Email: heyyoustudiovn@gmail.com

- Website: heyyoustudio.vn

- Fanpage: https://www.facebook.com/heyyoustudioo

2.4.2 General Introduction

Established in 2019, Hey You has undergone over three years of dynamic development, navigating the competitive landscape of the domestic fashion market Despite facing numerous contenders in the local brands market, Hey You quickly gained attention from Local Brand enthusiasts Beyond vigorous promotional marketing strategies, the brand distinguishes itself by delivering excellent quality in each product

2.4.3 Specific features

Hey You's designs, grounded in contemporary fashion trends, resonate with the preferences of young individuals, meeting the diverse needs of the majority Throughout its operational journey, the brand has demonstrated continuous improvement, introducing a lot of new products featuring unique and diverse fashion models This unwavering commitment has elevated Hey You to a

"national" Local Brand, endearing it to many young Vietnamese consumers and positioning it as

a top choice among young shoppers

Hey You Studio's product range encompasses jackets, tees, shorts, and accessories such as wallets, all characterized by a youthful and "cool" style coupled with stable quality and reasonable prices The majority of Hey You products are priced from thousands (VND) to less than 300,000 (VND) The brand's primary customer base comprises young individuals, with modest to moderate budgets, who gravitate towards youthful and dynamic fashion styles

As a relatively new brand to the Vietnamese Local Brand market, Hey You competes with well-established counterparts like Bad Habits, SWE, and Hades

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